RICHARD MARTINEZ v. FERNANDO MORENO

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Court of Appeal, Second District, California.

RICHARD MARTINEZ, Plaintiff and Appellant, v. FERNANDO MORENO, Defendant and Respondent.

B219029

Decided: March 30, 2011

Law Offices of Lee Arter, Lee Arter and John Worgul for Plaintiff and Appellant. Coreen R. Walson for Defendant and Respondent.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

INTRODUCTION

Plaintiff Richard Martinez appeals from an order granting the motion of defendant Fernando Moreno for equitable relief from a default judgment.   The default judgment had been entered without actual notice to Moreno, who only learned of the judgment when an abstract of judgment was personally served on him more than seven years after entry of the judgment.   Because Moreno had meritorious defenses, articulated a satisfactory excuse for not presenting a defense in the original action, and diligently moved to set aside the default judgment when he discovered it, the trial court properly exercised its discretion in granting relief from the default judgment.   We affirm that order.

FACTUAL AND PROCEDURAL HISTORY

On March 5, 1999, plaintiff Martinez, an employee of Southern California Gas Company, was called to connect gas service at 4321 E. 61st Street in Huntington Park. Moreno owned the property, which he leased to tenants, L. Lopez and Leticia Lopez.   Martinez was attacked and bitten by dogs owned by a person living at the property.

On March 12, 2000, Martinez filed a complaint for premises liability, general negligence, and strict liability against Moreno, L. Lopez, and Leticia Lopez.

On February 22, 2001, Martinez obtained an order to serve defendant Moreno by publication.   Service by publication was completed on March 26, 2001.

On May 22, 2001, default was entered against Moreno.   A default judgment hearing was held, default judgment was granted, and on August 31, 2001, judgment was entered ordering that Martinez recover $101,399 and costs of $661 from Moreno and from Leticia Lopez.

On June 1, 2009, defendant Moreno filed a motion to set aside and vacate the default judgment, on the ground that Moreno was never served with the complaint, had not received actual notice of the complaint, and was unaware of the action until he was served with an abstract of judgment on April 25, 2009.   The motion was also made on the ground that the action was suspect in that the complaint was based on a dog-bite incident where special damages were approximately $2,000 and the default judgment provided for $100,000 in general damages.

Moreno had worked as a Century 21 real estate agent from his office at 5831 Firestone Blvd. in South Gate for the previous 13 years.   Moreno admitted owning the property at 4321 E. 61st Street in Huntington Park from August 9, 1996, to July 30, 1999, although he never lived at that property.   Moreno did recall that defendant Leticia Lopez was formerly his tenant, from whom he collected rent at his South Gate business office.   Moreno stated that he was never notified of the litigation by Martinez, Martinez's attorney, or Leticia Lopez.   Moreno stated that his tenants mailed or walked their rent checks to his South Gate office, and that Martinez's counsel needed only to inquire of the tenant, Leticia Lopez, to learn Moreno's whereabouts.   Moreno stated that the first notice he received was on April 25, 2009, when two people came to his office and handed him a copy of an abstract of judgment for $102,060.   Moreno then went to the Norwalk courthouse, requested a copy of the file, and within two weeks retained an attorney.

On July 10, 2009, the trial court granted Moreno's motion to set aside the August 31, 2001, default judgment.   The trial court acknowledged that although the statutory time period within which to set aside a default judgment pursuant to Code of Civil Procedure sections 473, subdivision (b) and 473.5 1 had expired, the court had equitable power to set aside a judgment on the ground of extrinsic fraud or mistake.   The trial court found that Moreno had satisfied the requirements insofar as he had a defense, had established that he never received actual notice, and was diligent in obtaining counsel and seeking relief by filing the motion to set aside the default judgment.

An order granting the motion and ordering all abstracts of judgment filed against Moreno vacated and stricken was filed on July 22, 2009.   The trial court denied Martinez's motion for reconsideration.

Martinez filed a timely notice of appeal.2

ISSUES

Martinez claims on appeal that the trial court abused its discretion in ordering the default judgment vacated because:

1. The trial court abused its discretion where Martinez was never given proper notice that Moreno was moving to set aside the judgment on equitable grounds;

2. Even if the trial court could decide the motion on equitable grounds, Moreno's evidence did not meet the equitable standard for setting aside a default judgment;

3. The trial court misapplied Uva v. Evans (1978) 83 Cal.App.3d 356 (Uva )where the trial court never found that the judgment shocked the conscience;  and

4. Even if the trial court properly applied Uva v. Evans, that case does not provide authority for vacating an entire judgment.

DISCUSSION

1. Equitable Relief From Default Judgment

Construed as a statutory motion for relief from default pursuant to section 473 or to set aside default judgment pursuant to section 473.5, Moreno's motion was untimely.  Section 473, subdivision (b) requires a motion for relief from default judgment to be filed within six months after the judgment was taken.   Section 473.5, subdivisions (a) and (c) require a motion to set aside a default judgment to be filed within two years after entry of the default judgment or within 180 days after service of written notice of entry of default judgment.   Moreno filed his motion on June 1, 2009, more than seven years after entry of default judgment on August 31, 2001, making that motion untimely under either statute.

If statutory relief is no longer available, however, a trial court may vacate a default judgment on equitable grounds of extrinsic fraud or mistake.   (Rappleyea v. Campbell (1994) 8 Cal.4th 975, 981;  Steven W. v. Matthew S. (1995) 33 Cal.App.4th 1108, 1114.)

A motion for equitable relief from judgment is addressed to the trial court's sound discretion.   Absent a clear showing of abuse of discretion, the trial court's ruling will not be disturbed on appeal.  (In re Marriage of Grissom (1994) 30 Cal.App.4th 40, 46;  In re Marriage of Mansell (1989) 217 Cal.App.3d 219, 225–226.)

2. Moreno's Motion Gave Notice to Martinez That the Motion Was Made on

Equitable Grounds

Martinez claims on appeal that Moreno's motion did not give notice that he was moving for relief from the default judgment on equitable grounds, and that the grant of the motion for relief on equitable grounds was an abuse of discretion.

Moreno's motion conceded that it was not timely filed according to the requirements of section 473.5, subdivision (a) or section 473, subdivision (b).  Statutory grounds for relief being therefore unavailable, the remaining ground for relief was the equitable ground of extrinsic fraud or mistake.   The notice of motion stated the grounds for issuance of the requested order as lack of actual notice of the action to defendant Moreno, and that the action was based on a dog bite incident in which special damages were approximately $2,000 and the default judgment provided for $100,000 in general damages.   Both grounds of the motion were equitable in nature and were grounds for equitable relief from a default judgment.  (Munoz v. Lopez (1969) 275 Cal.App.2d 178, 181–182 [failure to serve defendant with process];  Uva v. Evans, supra, 83 Cal.App.3d at pp. 363–364 [damages award so out of proportion to evidence that it shocks the conscience].   Moreno's motion gave Martinez notice that the motion for relief from default judgment was made on equitable grounds.

3. Moreno's Showing Satisfied the Requirements for Obtaining Equitable Relief

From a Default Judgment Because of Extrinsic Mistake

Martinez claims that Moreno's evidence did not meet the standard for equitable relief from default judgment.   We disagree.

To set aside a judgment based on extrinsic mistake, the defaulted party must show that it has a meritorious case, articulate a satisfactory excuse for not presenting a defense in the original action, and demonstrate diligence in seeking to set aside the default once it is discovered.  (Rappleyea v. Campbell, supra, 8 Cal.4th at p. 982.)

Moreno asserted that he had worked at the same South Gate office for 13 years, that he had collected rent at that office from his tenant, defendant Leticia Lopez, that he was never notified of the litigation by Martinez or Lopez, and that the first notice he received of the existence of the action was being handed a copy of an abstract of judgment on April 25, 2009.   As argued in the motion, Martinez had only to ask Leticia Lopez for the address of her landlord to locate Moreno.   Moreno did not receive actual notice of Martinez's action against him.   Thus Moreno articulated a satisfactory excuse for not presenting a defense to Martinez's action.

Moreno also asserted that the Martinez's declaration in support of his default prove-up hearing stated that as a result of the dog bite he received at Martinez's property, his medical bills for treatment totaled $1,399.85 and he requested general damages of $100,000 and costs of $661.  (CT 105) The default judgment awarded him $102,060.  (CT 61) Moreno asserted, based on Uva v. Evans, that $1,399.85 in medical bills was so grossly disproportionate to the damages awarded by the judgment as to be without evidentiary support and shocking to the conscience, which required reversal of the judgment for retrial of the issue of damages.  (Uva v. Evans, supra, 83 Cal.App.3d at pp. 364–365.)   Thus Moreno demonstrated a meritorious defense.3

Moreno stated that he never received any notice of Martinez's lawsuit until April 25, 2009, when a man and woman, whom Moreno had never met before, handed him an abstract of judgment for $102,060 entered against him on August 28, 2001.   Moreno stated that he immediately went to the Norwalk courthouse and ordered a copy of the court's file, and retained the services of an attorney within two weeks.   Moreno's motion to vacate and set aside the default judgment was filed on June 1, 2009.   Thus Moreno demonstrated diligence in seeking to set aside the judgment once he discovered it.

Moreno's showing satisfied the three requirements for equitable relief from a default judgment because of extrinsic mistake.

4. Application of Uva v. Evans Was Not an Abuse of Discretion

Martinez claims that the trial court misapplied Uva v. Evans, because it did not find that the judgment shocked the conscience and vacated the judgment in its entirety.

Uva v. Evans was a defendant's appeal from a judgment for plaintiff after the trial court denied defendant's motion to set aside a default judgment entered for a plaintiff injured by being bitten by a dog allegedly owned by the defendant.  Uva held that entry of a default judgment awarding $30,000 in general damages, when medical expenses were no more than $2,332, “was so grossly disproportionate as to be without evidentiary support and shocking to the conscience,” and required reversal and remand for a new trial on the issue of damages.  (Uva v. Evans, supra, 83 Cal.App.3d at pp. 364–365.)   The Uva court addressed its power to review the question of excessiveness of damages on appeal from a default judgment.  Uva determined that the appellate court was not precluded from reviewing damages on appeal from a default judgment:  “An appellate court may interfere with [the trier of fact's determination of damages] only where the sum awarded is so disproportionate to the evidence as to suggest that the verdict was the result of passion, prejudice or corruption [citations] or where the award is so out of proportion to the evidence that it shocks the conscience of the appellate court.”  (Id. at pp. 363–364.)   The order granting the motion to vacate the default judgment stated that Moreno appeared to have a defense, “at least with respect to the amount of the default judgment entered in comparison to plaintiff's special damages[,]” citing Uva v. Evans.   That the trial court did not expressly find that the amount of the default judgment as compared to plaintiff's special damages “shocked the conscience” is of no importance.   The ratio of special damages to the damages awarded by the default judgment to Martinez was even greater than that which Uva found to be “so grossly disproportionate as to be without evidentiary support and shocking to the conscience.” 4 (supra, 83 Cal.App.3d at pp. 364–365.)   The damages awarded in this case satisfied the criteria in Uva for reversal as being so out of proportion to the evidence that it shocks the conscience of the appellate court.   There was no abuse of discretion in applying Uva review.

Martinez also argues that that Uva v. Evans only applies to the amount of the award of damages and does not provide authority to vacate an entire judgment.   The grant of equitable relief from judgment, however, did not rely on Uva v. Evans.   Instead the trial court applied the criteria of Rappleyea v. Campbell, supra, 8 Cal.4th 975, determined that Moreno satisfied those criteria, and granted the motion, which vacated and set aside the default judgment in its entirety.   There was no abuse of discretion.

DISPOSITION

The order is affirmed.   Costs on appeal are awarded to Fernando Moreno.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

We concur:

FOOTNOTES

FN1. Unless otherwise specified, statutes in this opinion will refer to the Code of Civil Procedure..  FN1. Unless otherwise specified, statutes in this opinion will refer to the Code of Civil Procedure.

FN2. An order setting aside a default judgment is appealable as an order after judgment.  (Aheroni v. Maxwell (1988) 205 Cal.App.3d 284, 289, fn. 1.).  FN2. An order setting aside a default judgment is appealable as an order after judgment.  (Aheroni v. Maxwell (1988) 205 Cal.App.3d 284, 289, fn. 1.)

FN3. Moreno appears to have an additional defense.   In compliance with section 425.10, subdivision (b), Martinez's complaint included no statement of damages.   The record on appeal, however, contains no section 425.11, subdivision (c) notice setting forth the nature and amount of damages sought, which must be served on the defendant before a default may be taken.   Consequently section 580, subdivision (a) prohibits the trial court from granting to the plaintiff relief that exceeds that demanded in the complaint or the section 425.11 statement.   This lack of notice of damages sought is an additional ground for reversal of a default judgment.   (Schwab v. Rondel Homes, Inc. (1991) 53 Cal.3d 428, 435.).  FN3. Moreno appears to have an additional defense.   In compliance with section 425.10, subdivision (b), Martinez's complaint included no statement of damages.   The record on appeal, however, contains no section 425.11, subdivision (c) notice setting forth the nature and amount of damages sought, which must be served on the defendant before a default may be taken.   Consequently section 580, subdivision (a) prohibits the trial court from granting to the plaintiff relief that exceeds that demanded in the complaint or the section 425.11 statement.   This lack of notice of damages sought is an additional ground for reversal of a default judgment.   (Schwab v. Rondel Homes, Inc. (1991) 53 Cal.3d 428, 435.)

FN4. Damages awarded in the trial court in Uva were 12.8 times medical expenses.   Damages awarded in this case were approximately 73 times medical expenses..  FN4. Damages awarded in the trial court in Uva were 12.8 times medical expenses.   Damages awarded in this case were approximately 73 times medical expenses.

CROSKEY, Acting P. J. ALDRICH, J.